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Living Wills as a Catalyst for Action

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  • Avgouleas, Emilios
  • Goodhart, Charles
  • Schoenmaker, Dirk

Abstract

Living Wills should help the resolution of a cross-border financial institution in difficulties by clarifying and simplifying the legal structure, and making that legal structure commensurate with the functional business parts of the wider institution. An innovation could be to incorporate a proposal for burden sharing between countries in Living Wills. This may enable burden sharing on an institution by institution basis. There remain, however, problems arising from the inconsistencies and incompatibility of the laws relating to the insolvency procedures in the various countries. Many countries are currently introducing special laws covering the process of resolution of systemically important financial institutions. This creates a window of opportunity to introduce a consistent legal basis for the resolution of systemically important financial institutions across the G20 countries.

Suggested Citation

  • Avgouleas, Emilios & Goodhart, Charles & Schoenmaker, Dirk, 2010. "Living Wills as a Catalyst for Action," Working Papers 10-09, University of Pennsylvania, Wharton School, Weiss Center.
    • Handle: RePEc:ecl:upafin:10-09
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    File URL: http://fic.wharton.upenn.edu/fic/papers/10/10-09.pdf
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    References listed on IDEAS

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    2. Charles Goodhart & Dirk Schoenmaker, 2009. "Fiscal Burden Sharing in Cross-Border Banking Crises," International Journal of Central Banking, International Journal of Central Banking, vol. 5(1), pages 141-165, March.
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    Cited by:

    1. Goodhart, C. A. E., 2010. "The Changing Role of Central Banks," Working Papers 11-27, University of Pennsylvania, Wharton School, Weiss Center.
    2. Frank A.G. den Butter, 2011. "The Macroeconomics of the Credit Crisis: In Search of Externalities for Macro Prudential Supervision," Chapters, in: Emiel F.M. Wubben (ed.), Institutions and Regulation for Economic Growth?, chapter 10, Edward Elgar Publishing.
    3. Charles Goodhart, 2010. "The changing role of central banks," BIS Working Papers 326, Bank for International Settlements.
    4. Edward Kane, 2010. "Redefining and Containing Systemic Risk," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(3), pages 251-264, September.
    5. Jean Dermine, 2013. "Bank Corporate Governance, Beyond the Global Banking Crisis," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 22(5), pages 259-281, December.
    6. Annemarie van der Zwet, 2011. "Crisis Management Tools in the EU: What Do We Really Need?," DNB Occasional Studies 902, Netherlands Central Bank, Research Department.
    7. Charles A. E. Goodhart & Dimitrios P. Tsomocos, 2011. "The Role of Default in Macroeconomics," IMES Discussion Paper Series 11-E-23, Institute for Monetary and Economic Studies, Bank of Japan.
    8. Capponi, Agostino & Dooley, John M. & Oet, Mikhail V. & Ong, Stephen J., 2017. "Capital and resolution policies: The US interbank market," Journal of Financial Stability, Elsevier, vol. 30(C), pages 229-239.
    9. Emiel F.M. Wubben (ed.), 2011. "Institutions and Regulation for Economic Growth?," Books, Edward Elgar Publishing, number 14256.
    10. Avgouleas, Emilios & Goodhart, Charles & Schoenmaker, Dirk, 2013. "Bank Resolution Plans as a catalyst for global financial reform," Journal of Financial Stability, Elsevier, vol. 9(2), pages 210-218.
    11. Richard J. Herring, 2012. "Incentives to Improve the Corporate Governance of Risk in Financial Institutions," Chapters, in: James R. Barth & Chen Lin & Clas Wihlborg (ed.), Research Handbook on International Banking and Governance, chapter 16, Edward Elgar Publishing.
    12. Alford, Duncan, 2013. "International Financial Reforms: Capital Standards, Resolution Regimes and Supervisory Colleges, and their Effect on Emerging Markets," ADBI Working Papers 402, Asian Development Bank Institute.

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